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Hedging Obamacare: Battered Health Players Are Poised to Score Big

It's a well established fact the some of the best hitters in baseball have the dubious distinction of also appearing on the hit by pitch leader board. This can be the result of a lot of different factors, but chief among them is the ability these sluggers have to hang in there when it might seem like a good idea to most others to bail out.

In much the same way, the slow and continuous creep toward Obamacare has shaken many stoic health care investors out of the game, and sent them rushing to the refuge of sectors with less unpredictability. Of course, as in baseball, for those who can hang in there, opportunities do exist within an ever-changing legislative landscape that has trillions of dollars on the line.

Take the health insurers (KIE), for example. According to Paul Keckley, executive director at the Deloitte Center for Health Solutions, this group of roughly 400 commercial businesses has already been adjusting to Obamacare for three years.

"They actually made the changes pretty quickly," he says in the attached video, adding that their "big challenge" now is dealing with state-run health exchanges that allow consumers to shop different plans. "I would say this is a sector that's growing. It's a sector that, as a result of the (Obamacare) law, is seeing government sponsored managed care, especially Medicaid managed care, be a growth market."

Another area that is re-inventing itself, Keckley says, is Big Pharma (XPH), which was hit by a "one-two punch" of $140 billion worth of expiring patents as well as continued strides toward single-payer drug purchases who demand lower and lower prices and volume discounts. He says it's an industry that is "trying to recover" by finding new ways "to mitigate risk" around how (and how many) drugs it brings to market, while looking to expand sales globally.

Whether it is drug-makers, device-makers or data-management companies, Keckley highlights the efforts companies are making in order to see their way through the quagmire to the opportunities that exist on the other side. As he says of the info-tech group that focuses on electronic health records, "it will be a growth sector...but in all likelihood there will be a lot of failures along the way."